How are business schools in the Philippines innovating? Lessons to be learned

Last Friday (Feb. 14, 2014), we ended by pointing out that developing business school innovation programs is mostly about research. We singled out the Hong Kong University of Science and Technology (HKUST) Business School where its program for its doctoral students prepares them for a research career in universities, research institutes, government, and business organizations especially in the Asia-Pacific region.

Then we closed by asking: “What about in the local scene? What’s something like HKUST that’s going on in the College of Business at De La Salle University?” It is to these questions we now turn our attention.

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The Vision Statement of De La Salle University (DLSU) defines the school as primarily “a research university” and only secondarily as a teaching school. All its colleges are dedicated to research and are doing “high impact” research. There’s only one exception: the College of Business (COB). Many of the professors are doing research, but not the high impact type.

It was in mid-2012 when DLSU president Bro. Ricky Laguda invited the Senior MRx-er to conduct a one-year long research mentoring with the COB faculty. The Senior MRx-er had research mentoring experience with a few volunteering AIM professors before his 2004 retirement, so he accepted the invitation.

In order to set up innovative COB programs based on research, DLSU-COB defined the strategy choice not in either-this-or-that terms but as a both-this-and-that kind of choice. The first choice, which COB called the “Open Strategy,” was traditional in the sense that it has been the way all business schools pursued research. The DLSU Faculty Development Manual characterized the Open Strategy as “encouraging all COB faculty members to publish in pre-selected high impact journals.”

The other choice was a “Selective Strategy.” As its name suggests, it consisted in pre-selecting those faculty members who will constitute the 10 percent to 20 percent small group of “Research Professors” while the rest will be “Teaching Professors.” These two choices were combined into one: “Pursue both the Open and Selective Strategy.”

At the start, when COB was thinking in terms of either an Open Strategy or a Selective Strategy, almost everyone assumed that the former strategy for innovation research has not worked. But when the choice was reframed as “both Open Strategy and Selective Strategy,” the question as why the Open Strategy has not worked was raised. The follow-up question came immediately: “What can be done to make this research strategy more research productive?’

Open-Source Approach to Innovation

The Senior MRx-er suggested trying the World Bank’s “Development Marketplace” approach. He learned about this research innovation model after reading a Harvard Business Review article.

In 1998, World Bank President James Wohlfenson approved an “experiment” to fight poverty via a worldwide research competition. There were judges, evaluation rounds, and million dollar prize money for the winners. The prize money attracted a very high number of researchers to submit their work.

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The idea in the experiment was to take an open-source approach to inviting innovation research proposals on varied challenges. These included innovative ideas on energy, public health, and education. The assumption was that poverty was a function of energy, public health and educational problems.

There were thousands of proposals that the World Bank received, a response that was “messy and chaotic.” So in 2005, it changed the rules of the competition. World Bank limited the event to just one challenge, namely, “poverty as a function of economic growth and sustainable development.” Some 2,600 proposals were submitted from 136 countries. World Bank found the competition “more intense,” but got higher quality research, making the approach more “successful.”

The “success” prompted World Bank to bring the experiment down to the country level, calling it “Country Marketplaces.” It basically invited “grassroots ideas” from one country to another. So the Senior MRx-er asked DLSU-COB: “Will something like a ‘Research Marketplace’ help the school in its research for developing innovation programs? So what can make this open strategy be innovation research work for COB?”

Since what made the World Bank “experiment” really effective was the prize money, the most heard answer to these questions was this: “It’s a matter of funds. It’s about fund sourcing.” So the discussion turned to this question: “From where can COB quickly fund source for innovation research?” There was the Harvard Business School (HBS) to benchmark against and to learn from.

The HBS 2007 report on its “Sources and Uses of Gifts and Endowments” showed that HBS received the larger portion of its $95 million “gifts and endowments” from alumni. The alumni gave these “in perpetuity,” that is, without HBS accessing the principal.

What was of more interest is how those funds were used. According to the report, 50 percent were for professorships and faculty research; 25 percent for MBA & DBA student fellowships; 18 percent for HBS ongoing operations; and 7 percent for “discretionary investment in new opportunities.” So the greater bulk of the money was used for research projects and only a near fifth for operations and administrative purposes. That’s an effective and efficient fund usage.

Now, how is the DLSU sourcing and usage of “gifts and endowments?” Take a look at the public document about the DLSU Science Foundation’s 2011-2012 President’s Report. The interesting portions of the report tell us that there were 86 unused professorial chair funds, and 196 unused endowed scholarship funds. Although the exact total amount unused is undisclosed, it’s easy to guess that the money to “divert” to fund innovation research and to offering a truly substantial money prize for “winning” research projects is abundant and available.

As to the equally interesting “Selective Strategy” for innovation research, once more our space tells us that we cannot tackle this in this column. We’ll take it up next Friday.

Dr. Ned is coming up with a “School Marketing Success seminar.” Please email us at [email protected] or [email protected], call 8132703 or visit www.saltandlight.asia for details. To discover how to get FREE mentoring from Dr. Ned, visit www.nedmarketing.com

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